RUBIS SCA

ANALYST NOTE - Dec. 5 2024

2024 Guidance Revised Down, Valuation Unchanged

Rubis revised its guidance for FY 2024 EBITDA down from 725 - 775 million euro to 675 – 725 million euro. The revision is the result of 1: lower oil prices negatively impacting short-term inventory values, 2: changes in the Keyan retail pricing formula taking longer than expected, and 3: lower demand for bitumen shipping in North America. Our target valuation of €30.78 per share remains unchanged as the model’s base case had already factored in below average growth in African service stations and declining shipping margins, with FY 2024 EBITDA forecasted at 668 million euro.

In other guidance, management’s expectations for 2024 net income are unchanged from their previous estimates after accounting for the higher-than-expected capital gain (83 million euro vs 75 million euro) from the sale of its 55% stake in the Terminals JV to iSquared Capital. FX losses, which were a major pain point in 2023 and 2022, are improving faster than expected.


EXECUTIVE SUMMARY - Jun. 18 2024

Rubis SCA (RUI), listed on Euronext Paris, is a French multinational energy company with a diversified portfolio spanning traditional and renewable energy sectors. Rubis’s growth outlook is driven by two core initiatives: an expansion into renewable energy via its acquisition of Photosol, France’s third-largest solar operator, and sustained growth in its African energy distribution business.

The acquisition of Photosol positions Rubis to benefit from Europe’s legislative push toward green energy. Photosol holds a pipeline of over 4.3 GWp in solar projects, with renewable EBITDA projected to grow from €29 million in 2023 to €168 million by 2028, representing a CAGR of over 40%. Rubis's oil distribution arm, primarily active in Africa and the Caribbean, offers stable revenue and cash flow. The African business is forecasted to grow at a CAGR of 13%, with the oil segment’s revenue reaching €4.4 billion by 2028, driven by Rubis’s dominance in aviation fuels and regional fuel station networks.

Diluted EPS is projected to grow from €3.17 per share in 2023 to €4.79 per share in 2028. Dividend is to increase from €1.92 to €3.92 in 2028, supported by strong cash flow from renewables and emerging markets growth.